NUCLEAR:

U.S. in early talks about int'l leasing arrangements -- official

Department of Energy officials have spent weeks trying to knock down reports that they have been interested in building a nuclear waste repository in Mongolia.

Now, the Obama administration is going a step further, disclosing that what DOE hopes to do is "lease" uranium from other countries, then return the spent fuel to the originating country.

A senior Obama administration official told Greenwire earlier this month that the government is in preliminary talks with several countries, including Mongolia, Japan and the United Arab Emirates, about setting up commercial nuclear fuel leasing arrangements.

In one example of how a fuel leasing arrangement could work, countries with uranium reserves could mine, enrich and fabricate the material and lease it to reactor companies abroad. Spent nuclear fuel would then be sent back to the originating country, the official said.

Discussions have not touched upon what those countries would do with the waste, the official said, but the United States hopes to prevent proliferation by providing alternatives to domestic enrichment and reprocessing capabilities.

Other countries and international entities have also been working to create "fuel banks" -- reserves of nuclear fuel for countries facing fuel supply disruptions -- the official said. So far, the International Atomic Energy Agency (IAEA) and Russia have taken firm steps to set up international fuel banks, and Kazakhstan has volunteered to host the IAEA fuel bank, said Mark Hibbs, a nuclear energy analyst with the Carnegie Endowment for International Peace. Last week, the United States announced plans to set up a fuel bank using excess uranium from the country's nuclear weapons program (E&ENews PM, Aug. 18).

But Hibbs said there have been considerable differences of opinion within the Obama administration on how to move forward with nuclear fuel leasing.

"Some of the differences have to do with how the U.S. would implement the conditions for the supply of sensitive nuclear technology to new nuclear countries," Hibbs said.

The United States' participation in or sponsorship of any complex nuclear fuel leasing program involving fuel supply, enrichment and storage of spent fuel with foreign countries depends on the resolution of a struggle between Congress and the executive branch on what America will require in future nuclear cooperation agreements, he said.

Countries of interest

The United States currently has nuclear cooperation agreements under Section 123 of the U.S. Atomic Energy Act with Japan and the United Arab Emirates, but not Mongolia, according to federal officials. Such agreements are required for significant transfers of nuclear material, equipment or components from the United States to another nation and work in conjunction with nonproliferation efforts.

U.S. companies can sell advanced nuclear information and technology, such as reactors, to the United Arab Emirates. The United Arab Emirates -- which agreed not to enrich uranium or reprocess used fuel under the 123 agreement -- hopes to develop its nuclear industry in coming decades and signed an agreement in February with South Korea for the construction of four nuclear reactors by 2020 (ClimateWire, Feb. 25).

Japan, on the other hand, already has a large nuclear fleet and is seeking ways to dispose of its nuclear waste, said Edwin Lyman, a senior scientist with the Union of Concerned Scientists.

Some communities in Japan are wary of expanding dry cask storage of nuclear waste because such facilities could become permanent, Lyman said. The country could build more dry storage facilities, but the question is whether Japan has the political will to find a domestic permanent geologic repository, he added. Japan is also struggling to defuse a nuclear disaster that erupted at its Fukushima Daiichi nuclear complex after the plant was struck by an earthquake and tsunami on March 11, triggering explosions, radioactive leaks and multiple evacuations.

Reports that the United States was in discussions to build a nuclear waste repository in Mongolia started swirling after Richard Stratford, director of the State Department's Nuclear Energy, Safety and Security Office, told the Carnegie International Nuclear Policy Conference on March 29 that the United States was in discussions about building an "international storage depot" for spent nuclear fuel in Mongolia (Greenwire, May 9).

Stratford said U.S. officials were discussing forging a 123 agreement with Mongolia that could involve building an international nuclear waste repository of some type. The U.S. Embassy in Mongolia later denied Stratford's statement, and DOE said the United States cannot negotiate commercial deals or tell another government whether or not to take spent nuclear fuel.

Although the United States does not have a nuclear cooperation agreement with Mongolia, the two countries signed a memorandum of understanding last year to cooperate on civil nuclear technology, including security, nonproliferation and waste management.

The land-locked developing country in central Asia bordering Russia and China has a parliamentary government and limited economic development because of its harsh climate, scattered population and expanses of unproductive land, according to the IAEA. Mongolia's economy has traditionally been based on herding and agriculture, but foreign investors are attracted to the country's large deposits of copper, gold, coal, uranium, tin and tungsten, according to the Central Intelligence Agency. Half of the country's total external trade is with China, the CIA has reported.

The United States would need to establish an agreement with Mongolia if countries with U.S.-obligated fuel were to ship nuclear waste there, Lyman has said (Greenwire, May 9).

Lyman said there has been no indication that nuclear fuel leasing arrangements being discussed would involve spent nuclear fuel from American reactors but added that if another country is willing to accept foreign waste, it might prompt officials and other experts to take a fresh look at the option.

Hibbs said the commercial nuclear fuel leasing arrangements the administration official discussed seem to be consistent with what some U.S. officials want to see for the International Framework for Nuclear Energy Cooperation (IFNEC), formerly the Global Nuclear Energy Partnership.

The Obama administration scrapped parts of GNEP, which was part of the George W. Bush administration's efforts to accelerate research and development on the reprocessing of spent nuclear fuel in reactors (ClimateWire, Dec. 24, 2009). The partnership was seeking to create "cradle-to-grave fuel services" under a regulated market for enriched uranium, which would allow a few large countries to supply smaller ones with enriched uranium to burn in reactors, sparing them the billions of dollars needed to build facilities for uranium processing and disposal (Greenwire, Oct. 26, 2010).

But Hibbs also acknowledged that preliminary talks with Mongolia, which was not part of the original GNEP partnership, add a new dimension. Mongolia is now an observer country in IFNEC, he added.

Potential challenges

Hibbs said involving Mongolia in such a nuclear fuel leasing program might be logical because the country has uranium reserves and relatively few resources to further its economic development but added that there are serious questions about how Mongolia could contribute to such international leasing arrangements because the country has no "nuclear expertise."

"It's not clear how transparent its corporate and political governance structure is; all these questions would have to be resolved before any project like that could go forward," Hibbs said.

The United States also recently made an agreement together with the nuclear supply countries that would "discourage the transfer of enrichment technology or reprocessing technology to Mongolia," Hibbs said.

The United States and 45 other countries in the Nuclear Suppliers Group -- a multinational organization of nuclear supplier countries seeking to limit proliferation of nuclear weapons -- agreed to new global terms of trade for uranium enrichment and spent fuel reprocessing in June.

The new guidelines require countries that want to obtain nuclear technology to meet a raft of requirements, including full compliance with the Nuclear Nonproliferation Treaty, being cited by international nuclear regulators for safeguard deficits, complying with a safeguard agreement with the IAEA and adhering to international nuclear safety norms.

Disagreements within the federal government and Congress could also pose challenges for new nuclear cooperation agreements.

Some lawmakers want increased congressional oversight of the international arrangements, especially if risky politics are involved.

Congress currently has little oversight because the agreements automatically go into effect unless the opposition can secure veto-proof majorities in the Senate and House (Greenwire, March 17).

House Foreign Affairs Chairwoman Ileana Ros-Lehtinen (R-Fla.) introduced a bill in late March that would amend the Atomic Energy Act of 1954 to impose stricter standards on international 123 agreements that govern U.S. exports of commercial nuclear technology, facilities, materials and services.

Under the legislation, cooperation agreements would be required to get an affirmative vote from Congress before going into effect and to strengthen nonproliferation agreements within those contracts in the future. Countries that enter into such agreements with the United States would have to forgo enrichment or reprocessing of nuclear material and assist in preventing state sponsors of terrorism from acquiring or developing weapons.

The legislation -- and its counterpart in the Senate -- would also require Congress to approve 123 agreements, and the United States would be required to demand the return of nuclear material and equipment from countries that withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons.

Ros-Lehtinen has said such oversight is crucial to preventing another nuclear crisis on par with Japan's crisis that erupted at the Fukushima Daiichi nuclear complex after the plant was struck by an earthquake and tsunami in March.

Gene Aloise, the Government Accountability Office's director of natural resources and environment, said in March that countries could simply enter into an agreement elsewhere if they dislike standards that the United States floats (Greenwire, March 17).

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